MannKind announced last week that it had found a new CEO. Founder Alfred Mann had to step in as interim CEO of the biopharmaceutical company after Hakan Edstrom resigned from his position as chief executive and president of MannKind in November. The newly appointed CEO Duane DeSisto will take charge as CEO of the company on January 5, 2016. He previously served as chief executive and president of medical devices company Insulet between 2003 and 2014.

MannKind Afrezza

Afrezza sales have been disappointing

DeSisto is taking over at a time when MannKind stock has fallen to the lowest level since 2012. The commercialization of the company’s much-hyped inhaled insulin drug Afrezza has been disappointing at best. Despite having the backing of French drugmaker Sanofi, Afrezza is expected to generate only about $8.5 million in 2015 sales. Bank of America analysts were expecting Afrezza sales to top $1 billion in 2018.

The Valencia-based company’s financial position is getting worse by the day. At the end of September quarter, the Afrezza maker had only $33 million in cash. Besides raising cash from individual investors, MannKind is involved in several financing agreements. The company has borrowed $40 million from Sanofi under their loan facility arrangement, and has $85 million under senior convertible notes. It also has an “extra special” loan arrangement with Alfred Mann.

Biggest challenge to MannKind may come from Sanofi

The biopharma company is running out of options to secure funds for its day-to-day operations, says Seeking Alpha contributor DoconStocks. In November, MannKind CFO Matthew Pfeffer announced listing on Tel Aviv Stock Exchange (TASE) to build cash reserves. The company was expecting to sell 50 million shares to Israeli index funds through private placements. But it was able to sell only 13.8 million shares (generating $36 million in proceeds).

But the biggest challenge before DeSisto comes from Sanofi. According to MannKind’s latest 10-Q filing with the SEC, the French drugmaker can terminate its licensing agreement with MannKind at anytime on or after January 1, 2016 if it finds that the commercialization of Afrezza is no longer economically viable in the US. Sanofi can also terminate the contract with six months’ written notice “without cause.”

DeSistor might rescue MannKind in the long run by developing new drugs using the company’s Technosphere technology. But he will have to first ensure its survival as a going concern.